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It’s probably because congress took those big surpluses, and spent them on hookers and blow, and handed back to the forced not-savings not-insurance program a bunch of non-negotiable IOUs.

To cash in those IOUs, they’ll have to hand them back to the already broke government, who would then have to sell even more bonds to the worldwide market to raise enough cash to meed the “obligations”. (Those obligations could be modified anytime by congress, thus the quotes.)

While some of you wacknuts call it the “most successful government program ever”, anyone with a lick of common sense can clearly see that it’s a ponzi-like scheme that would have worked great if everyone had continued having 2.5 kids and then drop dead at 66 years old.

So T-notes are non-negotiable IOUs? Better tell that to the bond investors who consistently put money there. It’s not as if they’re the most stable, reliable investment vehicle you can buy or anything. Oh, wait, yes they are.

And if Social Security is a Ponzi scheme, then why are you morons always griping about how bad the return on investment is, hmm? I thought Ponzi schemes were characterized by unsustainably high ROI. The fact is, the analogy doesn’t work at all, and it tells us everything we need to know about the critics of Social Security that they’re still willing to double down on a comparison that doesn’t even pass the laugh test, and keep repeating it as though repetition makes it any less ridiculous than it was the last hundred times.

Admit it: you just can’t stand the fact that there’s a government program that’s fully paid for (and even runs surpluses), is exceedingly popular, and works extremely well. Your brain just can’t get around the idea that government can actually do something right.

Oh, and the “drop dead at 66 years old” bit just shows that you’ve bought the “how to lie with statistics” argument about life expectancy hook, line, and sinker. Life expectancies are much higher now because of greatly reduced infant mortality rates. The important statistic for purposes of social security planning is how far beyond 65 people live once they make it to 65 — in other words, how long do you have to pay benefits to the average beneficiary. And that number hasn’t changed dramatically at all: from about 14 years to about 18.5 years.

They aren’t the normal t-bills that ordinary people can buy. Those of course can be bought and sold from and to anyone and are true marketable assets. The IOUs that are in the two “Trust Funds” are special. They can only be redeemed by the federal government. It’s the difference between me handing you a note that says “Standard Mischief owes tgirsch $50 dollars” and me actually signing over to you a mature T-bill for 50 dollars.

>And if Social Security is a Ponzi scheme…

I’ve taken great care to call it a “ponzi-like scheme”.

>I thought Ponzi schemes were characterized by unsustainably high ROI

it’s ponzi-like because it depends on a forced (not voluntary) pool of contributers that grow like the base of a pyramid. Of course, we’ve known about the vast crush of the retiring baby boomers since before I was born.

>Admit it: you just can’t stand the fact that there’s a government program that’s fully paid for (and even runs surpluses),…

It’s not running a surplus any more, and I’ve noted that the surplus has already been spent. Even the most optimistic projections from your side say it’s going to go totally bankrupt at some point. That makes it “unsustainable”. How come you guys can’t wrap your head around that? Think of it this way, call it “Peak Uncle Sugar”, except with absolutely no clue for what we’ll use for plan-B (true we’ll run out of oil one day, but we’re working on wind, solar, nuclear and other options for the future)

>…is exceedingly popular, and works extremely well.

“Free money” is extremely popular with people who know that they’ll never have to shoulder the burden of the debt. I don’t understand “extremely well” at all, because even if it was a forced savings plan where your FICA was converted into T-bills that were held in your name until 65, the ROI would far outstrip the benefits that one gets from a typical SS payout.

>…just shows that you’ve bought the “how to lie with statistics” argument ….

If SS was “sustainable”, we’d never have to dip into those IOUs. So we’re really not living longer nowadays? People still having plenty of kids per married pair nowadays? Really?

Oh and how come your side can’t wrap their heads around the idea that we can’t just sell an unlimited amount of Treasury notes to the rest of the world to fund our extravagant spending forever, without consequences?

What would happen to you if you were well over your head in debt, so much so that you couldn’t even break even, that you had to constantly find new people to borrow money from so you would not go into default, and then you were forced to roll your debt into an instrument where you had to pay 15% interest instead of 4% interest?

You know when Carter phased in a tripling of the SS tax (from 2% to 6.5%) he said that we would not have to draw down those IOUs until the year 2030. That makes his overly optimistic guess off by 21 years. Off the wrong way of course.

Are you sure those IOUs will last until 2037 (or 2042, or whatever magic fairy number has last been farted out by the unicorn), without an increase in taxes or a decrease in benefits?

The IOUs that are in the two “Trust Funds” are special. They can only be redeemed by the federal government.

A distinction without a difference, unless you can conceive of some scenario in which the US government would transfer those notes to some unnamed third party rather than redeeming them. And despite your disparaging use of the term IOU, all bonds are IOUs. So’s any money you put in your bank account, for that matter.

Rather than hiding the Social Security surplus under a mattress somewhere, they invested it in the most stable, secure investment vehicle available, a special kind of government bond — a bond whose differences from consumer government bonds make them more stable and less likely to default than other such bonds.

I’ve taken great care to call it a “ponzi-like scheme”.

OK, so it’s a moron-like comment, then. 🙂

it’s ponzi-like because it depends on a forced (not voluntary) pool of contributers that grow like the base of a pyramid.

Wait, Ponzi schemes were involuntarily joined? And when did it switch to being a pyramid scheme.

Look, if Social Security is a “ponzi-like scheme,” then so are car insurance and life insurance.

It’s not running a surplus any more, and I’ve noted that the surplus has already been spent.

First, if/when the economy recovers, it will almost certainly be back in surplus territory again. (And if it doesn’t recover, then the point is moot.) And as I noted above, the surplus is “already spent” in the same way that all investments are money already spent.

And again, if deficits are the problem, then why the special focus on Social Security? Why not bitch about defense spending, which has been running deficits for literally decades? Oh yeah, because the latter isn’t a “liberal” project.

Even the most optimistic projections from your side say it’s going to go totally bankrupt at some point.

To the extent that this is true (which isn’t that great, actually), it can be fixed with only minor adjustments. But even in the most pessimistic estimates, what other government program can you name that’s solvent and has enough surpluses built up to last at least 25 years? If it’s “unsustainable,” then everything else the government does is exponentially less sustainable, meaning Social Security ought to be pretty far down the list of problems to tackle. But Social Security is popular and *gasp* helps lower- and middle-class citizens, so it obviously must be the first thing to go!

“Free money” is extremely popular with people who know that they’ll never have to shoulder the burden of the debt.

The last people for whom Social Security amounted to “free money” died an awfully long time ago. All current beneficiaries paid in to the system for years and years.

I don’t understand “extremely well” at all, because even if it was a forced savings plan where your FICA was converted into T-bills that were held in your name until 65, the ROI would far outstrip the benefits that one gets from a typical SS payout.

This criticism might make sense if Social Security had ever been intended to be an IRA. It’s not. It’s a defined benefits group pension plan.

how come your side can’t wrap their heads around the idea that we can’t just sell an unlimited amount of Treasury notes to the rest of the world to fund our extravagant spending forever, without consequences?

We can. That’s why we oppose massive tax cuts for the wealthy during the economic good times when we should be paying down the debt. Counter-cyclical economics has two sides, you know.

What would happen to you if you were well over your head in debt, so much so that you couldn’t even break even, that you had to constantly find new people to borrow money from so you would not go into default

The 2.59% rate on the 10-year T-note tells me we’re nowhere near that point yet. The rates have been steadily going down for the past year. If bond investors were worried about a US default, those rates would be going up, not down.

>A distinction without a difference, unless you can conceive of some scenario in which the US government would transfer those notes to some unnamed third party rather than redeeming them.

I’m sorry, but I’ve been unable to purchase anything at all with an IOU, and I have excellent credit. You are not asking yourself why a special T-bill was created just for SS.

>Look, if Social Security is a “ponzi-like scheme,” then so are car insurance and life insurance.

Wrong. You can opt out of either of these. I’ll admit that SS isn’t really a confidence scheme. I mean people do lie and say it will be there to significantly fund a portion of my retirement, but I’m still forced to join against my will.

>And if it doesn’t recover, then the point is moot.

What if it doesn’t recover, because of the huge unfunded mandates of government programs like SS and Medicare?

>Why not bitch about defense spending, which has been running deficits for literally decades? Oh yeah, because the latter isn’t a “liberal” project.

I’m against $400 dollar hammers just as much as the next guy, but defense spending happens to fall under the “deliver the mail and defend the borders” responsibilities that is actually in the Constitution (which is a list of things that the federal government is allow to do) assisting my retirement plans without my consent and providing funding for other peoples healthcare are not listed as permitted federal powers.

You will also remember that defense spending allowed us to win the cold war without a nuclear exchange and also keep foreign armies out of my area of the country since 1812

>This criticism might make sense if Social Security had ever been intended to be an IRA. It’s not. It’s a defined benefits group pension plan.

Social Security was designed to be a FDR entitlement legacy that was easy to leave alone and hard to end. It would have continued to supply free money to the budget forever except for the population boom of the baby boomers and the lowered birthrates and the longer lifespans. My Dad’s alive today due to medical advanced in the last twenty years. He’s been getting SS for the last fifteen. The recent downturn in employment has also been, as you pointed out, a major factor. I guess Carter never calculated in the Great Recession in his rosy projections.

>That’s why we oppose massive tax cuts for the wealthy during the economic good times when we should be paying down the debt.

Well, Obama has already broken his “…no family making less than $250,000 a year will see any form of tax increase…” promise. I guess I’m wealthy by taxpayer standards😉. You know the root problem with Keynesian economics is that no one ever scrimps and saves during those “economic good times”. Barely balancing the federal budget during the Internet Boom Years (with help, i might add, from FICA income that should have been earmarked and invested to pay future benefits). You actually have to pay down the deficit spending a significant amount that was used to “stimulate the economy” during the last lean times. That’s never, ever been done before.

>The 2.59% rate on the 10-year T-note tells me we’re nowhere near that point yet. The rates have been steadily going down for the past year. If bond investors were worried about a US default, those rates would be going up, not down

I’m sorry, but I’ve been unable to purchase anything at all with an IOU, and I have excellent credit.

I’ve never been able to purchase anything at all with a bond, either. I must first cash in the bond, and with government bonds, I’ve always been able to do so.

You are not asking yourself why a special T-bill was created just for SS.

I’ll bite. Please enlighten us.

Wrong. You can opt out of either of these.

How is the ability or inability to opt out in any way relevant to whether something constitutes a “Ponzi-like scheme?”

What if it doesn’t recover, because of the huge unfunded mandates of government programs like SS and Medicare?

As we’ve been discussing, Social Security is not an unfunded mandate! Other parts have government may have borrowed against that funding, but that does not make Social Security in any way “unfunded.” Medicare’s the obvious big fish, and it is indeed underfunded, but attempts to correct that were derided as “socialism.” Of course, you could just eliminate it, but if you think that that wouldn’t have a massive and profound negative impact on the economy, I’ve got a bridge to sell you.

I’m against $400 dollar hammers just as much as the next guy, but defense spending happens to fall under the “deliver the mail and defend the borders” responsibilities that is actually in the Constitution

Again, irrelevant, unless you’re willing to accept tax increases to pay for that $400 hammer. A deficit is a deficit, whether or not it’s an explicitly constitutionally allowable one.

assisting my retirement plans without my consent and providing funding for other peoples healthcare are not listed as permitted federal powers.

Crying over 75-year-old spilled milk again, are we? You lost that constitutional battle decisively decades before either one of us was born, but that’s still irrelevant to the question of deficits vs. surpluses.

“You will also remember that defense spending allowed us to win the cold war without a nuclear exchange and also keep foreign armies out of my area of the country since 1812”

The cold war point is not so clear, but again, so what? The economy has thrived for most of the last 75 years because of social spending like Social Security, not in spite of it.

My Dad’s alive today due to medical advanced in the last twenty years. He’s been getting SS for the last fifteen.

The plural of “anecdote” is not “data.” In 1950, the average lifespan beyond 65 for those who reached 65 was 14 years. Today it’s 18.5 years. And in the future, it’s actually expected to go back down.

I guess Carter never calculated in the Great Recession in his rosy projections.

Again, so? I guess I didn’t realize the fate of the modern universe was inextricably linked to estimates that were made during the Carter administration. I could whine incessantly about how Reagan tripled the national debt, but what would be the point, and how would it be relevant to the current discussion?

Well, Obama has already broken his “…no family making less than $250,000 a year will see any form of tax increase…” promise.

You do love a good tangent, don’t you? But yeah, if you’re a tanning service junkie like John Boehner, I suppose you’d be pretty upset about that.

You know the root problem with Keynesian economics is that no one ever scrimps and saves during those “economic good times”.

Say, what’s going on with that red line during the late 1990s? And what was it generally doing before Reagan took office and told us that tax cuts pay for themselves? But hey, let’s not let facts get in the way of a good narrative.

Ever hear of a “parabolic blow off”?

I don’t suppose you have any actual evidence that this is what we’re seeing with bond rates, do you?

You’re not even going to take a guess? Even if I’ve alluded to the answer already? If your only guesses are that it was for some sinister “cooking the books” reason, you’re on the right track.

>How is the ability or inability to opt out in any way relevant to whether something constitutes a “Ponzi-like scheme?”

Why is this so hard to understand? It’s a “Ponzi-like scheme” because its like a ponzi scheme but not exactly. W-pedia: “A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from […] money paid by subsequent investors, rather than from any actual profit earned…”

>As we’ve been discussing, Social Security is not an unfunded mandate! Other parts have government may have borrowed against that funding, but that does not make Social Security in any way “unfunded.”

Social Security is not an unfunded mandate because congress could change the law at any time and those who have “payed into the system” would have no recourse. Although those who get screwed might argue differently. It’s useful to call it an unfunded mandate because the programs solvency past the point where it needs to dip into those IOUs rely on the federal government having a successful bond sale.

>Again, irrelevant, unless you’re willing to accept tax increases to pay for that $400 hammer. A deficit is a deficit, whether or not it’s an explicitly constitutionally allowable one.

A deficit is a deficit, and while I don’t have a problem with a small amount of debt, but perhaps if we eliminated the 95% of the government agencies that are not permitted to the federal government, we might be able to cut out a lot of deficit spending. You’ve already agreed that SS and Medicare are a huge bloat, why is it hard to imagine that we could ballance the budget and pay down some of the public debt if we didn’t have all these entitlement programs. (I’m not saying do this tomorrow, but it’s still legal, permissible and desirable to work toward the smallest, least infringing government that’s possible.)

>The plural of “anecdote” is not “data.”…

I’ll be sure to tell my dad that he’s an insignificant statistic.
Really now, do you want to defend this point? All I have to do is point to birthrate statistics, or the fact that for most of my grandfather’s employment FICA was 2% while most of my earnings have been taxes at well over three times that rate, Or that in FDR’s day x number of workers supported each retiree while nowadays it’s more like y number of workers per retiree (and x is greater than y).

>(taxing the rich) You do love a good tangent, don’t you?

Nonsense. You brought up your support of taxing the rich and paying down the debt during good times, and I merely pointed out that Obama has already trashed the promise that was the centerpiece of his economic recovery. He’s broken that promise several times in fact. Aren’t we talking about SS and FICA taxes? No fucking way am I off-topic.

>>(from way back) To the extent that this is true (which isn’t that great, actually), it can be fixed with only minor adjustments.

Again, Carter more than tripled FICA to make sure we would continue have a surplus that we could put into those special IOUs and SS would remain solvent. So what is my fair share of FICA? Should I have to pay 18% and not retire until I’m 75 so people who “paid into the ponzi-like scheme” their whole life can continue to get their checks?

>Say, what’s going on with that red line during the late 1990s? And what was it generally doing before Reagan took office and told us that tax cuts pay for themselves? But hey, let’s not let facts get in the way of a good narrative.

Indeed. It looks like he balanced the budget there during the boom years of the internet. But let’s look at that a little closer.

First off, with Keynesian economics, you need to do far more than balance the budget, you also have to pay down the debt. This is important because it reduces the amount of the federal budget spent in later years to service the public debt. If you personally took on a lot of debt while out of work, but then only “balanced” your personal budget when you started working again, people would consider you an idiot for spending 33% of your current income to still service debt incurred while you were out of work. While working (during economic good times) you would want to pay down and erase personal debt so if there were lean times in the future you would get your borrowing cushion back.

Even with the most optimistic book-cooking, Clinton barely retired any debt at all. but with realistic accounting, he retired none of it.

I’ll now tell you why they created those special non-negotiable T-bills. They did it because then they could take that Social Security surplus and place it in the general fund, and then consider that FICA surplus as tax revenue. Subtract that “revenue” from the budget and Clinton never balanced the budget. (No one has for decades. None of the public debt that we took on while trying to “prime the pump” has ever been paid back during any of the boom years. Ever. Period.

And that’s why in a nutshell that we’re in the Great Recession. Instead of paying down the debt we’ve just restructured it. Japan did pretty much the same thing and lost 15 years. If we could have “primed the pump” and gotten those green shoots to start growing we’d be OK by now. Re-inflating the housing bubble has been impossible, but we’ve sure spent a shitload trying.

If your only guesses are that it was for some sinister “cooking the books” reason, you’re on the right track.

That would still be relevant to the REST of the budget, no to Social Security’s solvency. The government must pay its bonds or default, and it can’t selectively default on them unless we let it. Funny, though, because that latter is precisely what the opponents of Social Security are arguing we should do.

“Why is this so hard to understand? It’s a “Ponzi-like scheme” because its like a ponzi scheme but not exactly.”

Perhaps you should re-read the question, as well as your Wiki link, and try again. Because you haven’t answered the question. Nothing in the Wikipedia link says anything about voluntary or involuntary. And the main point, that payouts are made from money that comes in from new buy-ins and not from actual returns on investment are precisely why I say that if you use that standard to describe Social Security as a “Ponzi-like scheme,” then any fair assessment of the car insurance and life insurance models must come to the same conclusion.

“A deficit is a deficit … but perhaps if we eliminated the 95% of the government agencies that are not permitted to the federal government, we might be able to cut out a lot of deficit spending. ”

Again, irrelevant to the question of Social Security, because until exceptionally recently, it not only didn’t add to the deficit, it detracted from it. So if you eliminated the payouts (the benefits) and also eliminated the taxes that support it, you wind up in a substantially WORSE position, deficit-wise. How does this in any way help your argument? Ooh, ooh, I know this one! It doesn’t!

“You’ve already agreed that SS and Medicare are a huge bloat”

I have? When did I describe either as “bloat,” or even imply that they were? (I’d probably say that’s a fair assessment of Medicare, given the massive corporate protectionism that’s built in, but again, fixing that is where we ought to be focusing if we’re really concerned about deficit reduction. Social Security has nothing to do with it.)

“why is it hard to imagine that we could ballance the budget and pay down some of the public debt if we didn’t have all these entitlement programs”

Well, IF we phased out those programs, and IF doing so didn’t have a contractionary effect on the economy, and IF we continue to collect taxes as though we were providing those programs even after we stop doing so, then yes, presumably, that could pay down a LOT of debt. Of course, we could accomplish the same thing by simply reforming Medicare and returning to the tax rates that were in effect for most of the Reagan administration, at which point we’d still have among the lowest taxes in the world. And, as an added bonus, we’d be doing it WITHOUT ass-fucking lower- and middle-class seniors! (Though I know that this would spoil the fun for a lot of conservative types.)

“I’ll be sure to tell my dad that he’s an insignificant statistic.”

We’re ALL insignificant statistics. He’s important to you, and I’m sure to many others. But in the overall picture of Social Security financing, the difference he makes is so trivial as to not be worth mentioning. As I pointed out, even if you lumped together ALL the guys like your dad, they don’t change the funding equation very much.

Of course, since you’re enamored of the grand importance of your dad in all of this, I’ll be sure to hold him singularly responsible if the government decides to gut Social Security, and tell him that YOU blamed him. 🙂

All I have to do is point to birthrate statistics, or the fact that for most of my grandfather’s employment FICA was 2% while most of my earnings have been taxes at well over three times that rate, Or that in FDR’s day x number of workers supported each retiree while nowadays it’s more like y number of workers per retiree

It’s certainly more expensive for us today than it was for them back then. Of course, I never argued otherwise. And that doesn’t make it “free.”

“and I merely pointed out that Obama has already trashed the promise that was the centerpiece of his economic recovery.”

If by “trashed” you mean “whittled around the edges,” I suppose so. But of course his critics are cooking the books even in making this accusation. They’re rapping him on the wrist for the minor tax increases, but not giving him credit for the tax cuts, which for most of the sub-$250K crowd actually outweigh any increases they may incur. Which is to say: the tax cuts outweigh the tax increases. Which is also to say: they’re still paying about the same or less, which is in keeping with his promise. Nice try, though.

So what is my fair share of FICA?

I don’t pretend to know all the numbers, but even if the most pessimistic estimates are true, the adjustments needed to return the program to solvency are quite minor. Nothing even approaching the Carter-era adjustments. Eliminating the wage cap would more than do the trick, and you wouldn’t have to raise the nominal rate at all.

It looks like he balanced the budget there during the boom years of the internet.

What it actually looks like is that debt went down, whether you measure it in inflation-adjusted dollars or as a percentage of GDP. But that’s an, err, inconvenient truth.

“Even with the most optimistic book-cooking, Clinton barely retired any debt at all. but with realistic accounting, he retired none of it.”

And yet he did vastly better than the Republicans who came before him or the one who came after him.

They did it because then they could take that Social Security surplus and place it in the general fund

Yep. And when Al Gore suggested a “lock box” for Social Security surpluses, he was laughed off the stage. By people like you.

Still, given a choice between borrowing money from China and borrowing it from Social Security, I can’t say I have a big problem with the latter. And we’ve got to borrow it, because people like you throw a hissy fit at the mere thought of raising taxes. Now I can already hear you arguing that what we ought to do is cut spending, but from where, exactly? Social Security, which has more than paid for itself? Defense? Good luck! Medicare? I agree, but not in the ways you might think.

Put a referendum on the ballot. In it, say that we can lower taxes by X% simply by cutting Medicare benefits, or Social Security benefits, or whatever. Guess what happens. Measures like that lose, generally by a better than a two-to-one margin.

And that’s the greatest sin that St. Reagan and his cronies committed. They recognized the fact that while people don’t like paying taxes, they very much like the things taxes pay for. So their solution was to argue that you could have your low-tax cake and eat it (via robust public services), too. In other words, they lied. The overwhelming majority of that debt you’ve been railing against was incurred on Reagan’s watch, and precisely because of that great lie.

And that’s why in a nutshell that we’re in the Great Recession.

That’s odd. I thought it was because lax regulation allowed Wall Street bankers to wildly chase unsustainable asset bubbles with other people’s money, and the whole house of cards came tumbling down, ruining lots and lots of people in the process. Good to know it’s just because we’ve been keeping your Dad alive too long.

>Nothing in the Wikipedia link says anything about voluntary or involuntary.

what part of “ponzi-like” do you not understand?

>..if you use that standard to describe Social Security as a “Ponzi-like scheme,” then any fair assessment of the car insurance and life insurance models must come to the same conclusion.

Unsubstantiated claim, please explain.

>If by “trashed” you mean “whittled around the edges,”

Actually, I can’t find squat on the details (nothing except dollar amounts) for the Obama tax cuts. My take home pay never got any larger. Where were the cuts?

Regardless, he promised to not raise any of my taxes. The penalty for not buying a conforming health care plan (because I want to keep the one I have now, the one I’m happy with) will far outweigh what I should have got. He signed off on that tax after it was deemed past and before his promised 5 day delay.

>It’s certainly more expensive for us today than it was for them back then. Of course, I never argued otherwise. And that doesn’t make it “free.”

>I don’t pretend to know all the numbers, but even if the most pessimistic estimates are true, the adjustments needed to return the program to solvency are quite minor.

You’ve just admitted that we’ll have to pay more to keep SS solvent, yet you’ve denied my claims about living longer and having less kids. SS is currently not sustainable, and a FICA tax raise will only “kick the can down the road”, not fix the problem for good. You are just transferring the debt to citizens that haven’t even been born yet. How is that for taxation without representation?

>And yet he did vastly better than the Republicans who came before him or the one who came after him.

You keep forgetting that I’m not a Republicans. In fact, I don’t think we’ve had a decent president since St. Reagan. He did do quite a bit of deficit spending, but he saved us from perpetual stalemate with the USSR. (Liberals don’t like to admit this despite the preponderance of evidence, yet there were plenty in congress all ready to go whole-hog spending what they called a “peace dividend” instead of following the school of Keynesian economics and paying off and retiring a significant portion of the public debt.) I’d cite Reagan winning the cold war for us, but you would just accuse me of thread-jacking.

You seem to want to ignore the fact that even Clinton expanded the size of the Federal government to record (at the time a record) levels instead of retiring a substantial portion of the debt during the boom years (in accordance to the much touted Keynesian economics theory)

>And we’ve got to borrow it, because people like you throw a hissy fit at the mere thought of raising taxes. Now I can already hear you arguing that what we ought to do is cut spending, but from where, exactly? Social Security, which has more than paid for itself? Defense? Good luck! Medicare? I agree, but not in the ways you might think.

Yes we’ve got to borrow some, but your still not getting the fact that there’s a finite amount of bonds we can sell. We’re in a pickle. We never paid down the debt during the boom years, so servicing the debt is hard and will get harder. Obama still is growing the size of government instead of shrinking it. Cuts in the military may be mandatory, but we still need to defend the border and prevent 747 suicide style attacks. Health care reforming Medicare deemed as passed was sheer idiocy but Bush also expanded Medicare (Bush did it too). Tax the people who actually do the real jobs creation in this country, and they’ll decide to play golf or go fishing instead of sinking their wealth into a new start-up company because the risk/reward ratio is crap.

>And that’s the greatest sin that St. Reagan and his cronies committed…

The great communicator talked directly to the people, and convinced them to get their congress-critters (you know, the ones with the power of the purse) to offer tax cuts, decrease public spending and cut back on government services, and use the economic might of the military-industrial complex to force the USSR to spend itself into bankruptcy trying to keep up.

>The overwhelming majority of that debt you’ve been railing against was incurred on Reagan’s watch, and precisely because of that great lie.

No that was Bush 2 and Obama. TARP and TARP2 and the bailout of Government Motors.

>Yep. And when Al Gore suggested a “lock box” for Social Security surpluses, he was laughed off the stage. By people like you.

You appear to be right about this. I really hated Bush’s “loot my mandatory stock-market investments to save the ponzi-like thing” but the media failed to help the Gore drone explain that the SS surplus has been squandered and that he’ll put it in a “lockbox” instead. That was proably too far from the official story that SS was fine and only crazys like myself are worried about SS.

Me, I think we need to phase out SS slowly and phase in a forced saving plan where the earner retains title to his assets. It’s suboptimal to the true libertarian path, but baby steps.

>That’s odd. I thought it was because lax regulation allowed Wall Street bankers to wildly chase unsustainable asset bubbles with other people’s money, and the whole house of cards came tumbling down, ruining lots and lots of people in the process.

Yea that’s part of it too. “Nutshell” went too far.

The Community Reinvestment Act allowed groups like ACORN to sue bankers. Instead of fighting the bank’s claim that these were sub-prime loans that the banks did not want on their balance sheets, they sold them to Fannie and Freddie. Herb and Barney managed to subvert Fannie and Freddie’s original charter to only buy conforming loans, and had the standards lowered. Everybody, (D) and (R) helped those corporate-personhood thingyes throw off the shackles of limited amounts of leverage and gambled their investors money against incredible odds. Greenspan allowed interest rates to stay too low too long and that fueled the housing bubble. At the end there, people who pumped gas for a living and were overdrawn were still able to secure a optional-ARM NINJA loan on a house that they planned to flip. Then the music stopped and there were not enough chairs.

Bush and Obama and congress bailed out all the banks that should have failed. If they had been allow to fail a lot of debt would have been cleared up in bankruptcy. Instead, it was added to the US balance sheet along with all the debt that was suppose to have been retired by paying down the debt during the boom years (in accordance to the much touted Keynesian economics theory)

Then Obama looted what was left of GM and Chrysler and gave that wealth to the unions instead of the bondholders (who were first in line) and the stockholders (second in line).

The part up there in Comment #8, where you said that Social Security was “Ponzi-like” but private insurance programs weren’t because you can opt out of the latter.

Unsubstantiated claim, please explain.

I did explain, which you would have seen if you read the whole sentence, instead of just the part you quoted. Let me help:

And the main point, that payouts are made from money that comes in from new buy-ins and not from actual returns on investment are precisely why I say that if you use that standard to describe Social Security as a “Ponzi-like scheme,” then any fair assessment of the car insurance and life insurance models must come to the same conclusion.

Now with added boldiness!

I can’t find squat on the details (nothing except dollar amounts) for the Obama tax cuts.

The penalty for not buying a conforming health care plan (because I want to keep the one I have now, the one I’m happy with) will far outweigh what I should have got.

Nice try, but existing plans are grandfathered in. So if you keep the plan you have now, the one you’re happy with, you won’t pay any penalty at all.

You’ve just admitted that we’ll have to pay more to keep SS solvent, yet you’ve denied my claims about living longer and having less kids.

Apparently the conditional expression is foreign to you. I said if the most pessimistic estimates hold true — and that’s not a given — then we would have to pay somewhat more, and that even in that situation it wouldn’t be much more. And while I have denied your claims about living longer making a big difference (because they’re false, or at least grossly exaggerated), I haven’t denied anything about people having fewer kids or the current worker to current retiree ratios, because those are actually true. But those latter are actually expected to stabilize, and may have already.

You keep forgetting that I’m not a Republicans.

No, I remember fully well that you’re one of those guys: the kind who bitches about Democrats constantly, but hides behind the “I’m not a Republican[s]” thing any time the conversation turns to how they’re just as bad or worse. You’re the guy who’s long on complaining about problems and short on offering any meaningful solutions. You just like to gripe.

You seem to want to ignore the fact that even Clinton expanded the size of the Federal government to record levels

Only if one measures in current dollars, which absolutely no economists do. What matters is the size of government relative to the size of the economy as a whole, and by that measure, government shrank throughout the 1990s.

your still not getting the fact that there’s a finite amount of bonds we can sell.

Why am I not getting that fact? Because I’m saying that we’re nowhere near that limit, and the evidence (as measured in treasury rates) backs me up on this?

We never paid down the debt during the boom years, so servicing the debt is hard and will get harder.

We’re paying a lower interest rate on our debt than at just about any other time in history. It may get harder at some point, but lately, it’s actually been getting easier. But again, you know the solution to this, and it would involve Obama breaking a promise on a scale that dwarfs what you’ve been pissing and moaning about.

Tax the people who actually do the real jobs creation in this country, and they’ll decide to play golf or go fishing instead

That’s always been the supply-sider argument. Too bad there’s no evidence that it actually works that way in real life. If they were right, nothing would have gotten done back when Ike was taxing the rich at 90%. But what did we actually have? A long period of sustained growth. So much for tax rates stifling it.

Besides, the “people who actually do the real jobs creation” are currently taxed at the lowest level they ever have been, and they’re still not doing any real jobs creation. Instead they’re hoarding the money. So if THEY won’t invest it in jobs creation, I guess I don’t have a problem with the government taking some of it from them and giving it to those who WILL invest it that way. Damn commie, me.

The great communicator talked directly to the people, and convinced them to get their congress-critters … to offer tax cuts, decrease public spending and cut back on government services

No, he didn’t. The tax cuts part, yes. The rest of it, bullshit.

A work problem has just cropped up, but I did want to mention that the idea that poor black people the Community Reinvestment Act had anything at all to do with the subprime mortgage crisis doesn’t pass the laugh test, and never has. The only people who believe that are the same types of people who believe that evolution is “just a theory.”

>Nice try, but existing plans are grandfathered in. So if you keep the plan you have now, the one you’re happy with, you won’t pay any penalty at all.

Do you actually have a cite for this? I mean we’re still finding surprises in the law that no one was able to read before it was deemed passed, but I’ve been told that my HSA does not qualify, and I’d have to do the same thing that people in Massachusetts (held out as a shining example, i might add), and pay the fine.

>No, I remember fully well that you’re one of those guys: the kind who bitches about Democrats constantly, but hides behind the “I’m not a Republican[s]” thing any time the conversation turns to how they’re just as bad or worse. You’re the guy who’s long on complaining about problems and short on offering any meaningful solutions. You just like to gripe.

You stay classy, tgirsch.

I’ll retaliate by damming you with faint praise: You are the least offensive tool of the Democratic party that blogs here, but you still tout the party line over principal most of the time. It’s not that I don’t have any solutions, it’s just that you hate anything I propose.

>That’s always been the supply-sider argument. Too bad there’s no evidence that it actually works that way in real life.

Anecdotally, I used to rent out a room in my townhouse. You may remember me commenting on it on one of your AC bleg. I don’t do that anymore because of the massive amounts of BS I have to go through to report and pay my fair share of taxes on a few thousand dollars per year. It’s just me experiencing this myself firsthand, but I tend to believe the supply-sider argument.

>No, he didn’t. The tax cuts part, yes. The rest of it, bullshit.

Too bad I actually lived through this part of history. I even remember the commercials and newspaper ads during the campaign.

>We’re paying a lower interest rate on our debt than at just about any other time in history. It may get harder at some point, but lately, it’s actually been getting easier.

However since we’ve got the largest debt to GDP ratio ever, and interest rates are at record lows, that probably means that your interest rate indicator is an unreliable indicator.

If interest rates were to merely double, we could get into deep doodoo, and the cost to service the debt would skyrocket. Admittance to the European Union required a Debt-to-GDP ratio of 60% or lower. Some EU members used off-balance sheet mischief to hide the fact that their ratio was too high. Now they’re having trouble servicing that debt. Does Greece, Spain, or Portugal ring a bell? I think we’re currently rocking around the 180% point. Don’t you agree that is cause for concern?

>”poor black people…”

I suppose there’s a corollary for Godwin’s for that. It’s too bad about “Real Life” getting in the way because I’d be curious what part exactly was a stretch of the truth.

did the Community Reinvestment Act NOT allow ACORN to sue banks?
were Fannie and Freddie’s standards NOT lowered?
are Barny and Herb blameless?
was Ron Paul guilty for allowing leverage limits to be relaxed?
Did Obama pay off GM’s bond holders and stockholders at 100% before transferring wealth to the unions, in accordance to law?

Do I really need one? Because if that weren’t true, you KNOW the consevosphere would be shitting litters of kittens about the whole mess. Hell, they got all bent out of shape about stuff that WASN’T in there, so you can just imagine what they’d be saying if something like that turned out to be in there.

Anyway, here. And, of course, if you get health care from your employer, then the onus is on them rather than you anyway.

You stay classy, tgirsch.

Meh. I haven’t got much patience for fence-sitters who go to great lengths to avoid personal criticism. 🙂

you still tout the party line over principal most of the time

If I had principal, I’d make a loan! It’s principles we’re concerned with here. What makes you think that the parts of the party line I tout are somehow incompatible with my principles? For a prominent example of where I differ from my liberal fellow travelers, take single-payer.

I don’t do that anymore because of the massive amounts of BS I have to go through to report and pay my fair share of taxes on a few thousand dollars per year.

Setting aside the fact that the plural of anecdote is not data, that type of nickel-and-dime stuff isn’t what the supply-siders are talking about at all. And how many jobs did you create in renting out that space? I’m guessing the number was pretty close to zero.

Too bad I actually lived through this part of history. I even remember the commercials and newspaper ads during the campaign.

Then it should be pretty easy to point out which social spending programs were cut with wide public support, shouldn’t it?

However since we’ve got the largest debt to GDP ratio ever

Since WWII, yes. “Ever,” no.

that probably means that your interest rate indicator is an unreliable indicator.

If there’s a more reliable indicator of the market’s confidence in the US to make good on its debts, I’d sure love to hear what it is.

If interest rates were to merely double, we could get into deep doodoo, and the cost to service the debt would skyrocket.

That would be a problem for new debt, but less so for existing debt. I’m reasonably sure that treasury notes have fixed interest rates.

I think we’re currently rocking around the 180% point.

Actually, it’s around 90%.

Don’t you agree that is cause for concern?

Yes, longer-term. High unemployment and economic stagnation are much more pressing immediate concerns. Of course, what you do about it depends on who you think is “right” when it comes to economics. Austrian and Chicago school types say that this is the time for fiscal austerity, while neo-Keynesians argue that such austerity measures would only worsen the slump, and would be self-defeating. I’m pretty sure it’s clear which side each of us will fall on.

From where I sit, counter-cyclical good, pro-cyclical bad.

I suppose there’s a corollary for Godwin’s for that.

Sorry, I should explain. See here. But I’ll admit I’m guilty of commandeering his hyperbole. I think it’s appropriate, and accurate.

Regarding the debt-to-GDP ratio, we might be talking apples and oranges, however. The 90% figure refers to government debt, i.e. the result of US budget deficits. When you look at TOTAL debt (including consumer debt and debt held by businesses) the picture becomes much, much worse.

Anyway:

[Me] The overwhelming majority of that debt you’ve been railing against was incurred on Reagan’s watch, and precisely because of that great lie.
[You] No that was Bush 2 and Obama. TARP and TARP2 and the bailout of Government Motors.

It’s true that what W and Obama run up will likely exceed what Reagan and HW ran up, but prior to the economic collapse of late 2008, Reagan/Bush were the runaway postwar “victors.” See, for example, here. And much of what we’ve seen WRT W is that he mimicked Reagan’s irresponsible tax policies, with similar results. Of course, once the economic shit hit the fan, all bets are off. Falling receipts have a lot more to do with the problem than the bailouts, as unpopular (across the entire political spectrum) as they are.

Me, I think we need to phase out SS slowly and phase in a forced saving plan where the earner retains title to his assets.

We’re definitely going to agree to disagree here. I think that moving from a guaranteed-benefit pension with broadly diversified risk to an all-IRA arrangement where all of the risk is concentrated on the individual, and where losses are not only possible, but entirely likely, seems exceptionally short-sighted to me.

Herb and Barney managed to subvert Fannie and Freddie’s original charter to only buy conforming loans, and had the standards lowered.

Again, this may have exacerbated the problem, but it certainly wasn’t causal. The overwhelming majority of bad mortgages (subprime and otherwise) were originated after the Fannie & Freddie bailouts, which is to say after the GSEs got out of the subprime business entirely. As much as libertarians hate to admit it, this was almost exclusively Wall Street’s baby. I know you think that McClatchy is just a bunch of pinkos, but the numbers don’t lie. Lenders weren’t making ludicrous loans because the government held a gun to their head and forced them to. They were doing it because in the short term, they were making an absolute killing, and because the wholly unregulated derivatives market allowed them to conceal the risk and pass it off to unsuspecting third parties (with a powerful assist by the ratings agencies).

> I especially like how SM is repeatedly claiming that the lines on that graph are going up as they go down.

It’s actually pretty simple, the line went down, except…

You can’t spend the Social Security surplus to pay down the debt and at the same time claim we didn’t spend the surplus, we saved it in those special, SS only IOU-not-negotiable-T-bills. Subtract the surplus unfairly applied, and you’ll find the lines did not go down. Mind you, it wasn’t just Clinton that pulled this accounting scam.

Also, due to the internet bubble-boom years, (remember pets.com and a million clones burning through their IPO cash and sinking like a rock?) the Social Security surplus was significantly larger. Clinton can take credit for this though, because Al Gore invented the internet.

>Reagan/Bush were the runaway postwar “victors.” See, for example, here. And much of what we’ve seen WRT W is that he mimicked Reagan’s irresponsible tax policies, with similar results.

how to lie with charts. How come all the data between FDR and Carter isn’t labeled (D) or (R)? And I seem to remember living through crazy inflation during the time of Nixon and Carter

>Setting aside the fact that the plural of anecdote is not data, that type of nickel-and-dime stuff isn’t what the supply-siders are talking about at all.

The IRS thought it relevant, I suppose the supply-sider would be too. I’d have vastly preferred just folding the cash in half and sticking it in my pocket.

>And how many jobs did you create in renting out that space? I’m guessing the number was pretty close to zero.

One part time job for several years. Hey, a census job of 20 hours a week for several weeks counts as a stimulus job, mine was at least 10x that. I also drove down the cost of housing in my neighborhood by increasing the supply.

>If there’s a more reliable indicator of the market’s confidence in the US to make good on its debts, I’d sure love to hear what it is.

It’s not a reliable indicter because the banks buy those short term t-bills and then they immediately sell some of them to the Federal Reserve for a profit. That’s screwing up market signals.

>That would be a problem for new debt, but less so for existing debt. I’m reasonably sure that treasury notes have fixed interest rates.

They do, different terms. But there is a lot of short term T-bills out there because of the “quantitative easing” mischief that the fed is doing. They mature earlier and need to be rolled over into new t-bills (at perhaps a vastly higher rate sometime in the not so distant future)

>We’re definitely going to agree to disagree here. I think that moving from a guaranteed-benefit pension with broadly diversified risk to an all-IRA arrangement where all of the risk is concentrated on the individual, and where losses are not only possible, but entirely likely, seems exceptionally short-sighted to me.

Your solution seems to be raising taxes and/or rolling back benefits so we are yet again sending a SS surplus to the book cookers. That will not solve the problem permanently, it’ll just kick the can down the road. We can’t keep raising taxes forever (and we’ve already more than tripled them) whenever SS stops producing a surplus, though I suppose it’s possible to kick the can so far down the road that you won’t have to worry about it in your lifetime. Every year we delay makes it that much harder to defuse. Wouldn’t you rather be the generation that fixed the looming SS time-bomb rather than the generation that fosters off the problem onto your unborn ancestors?

>Again, this may have exacerbated the problem, but it certainly wasn’t causal. The overwhelming majority of bad mortgages (subprime and otherwise) were originated after the Fannie & Freddie bailouts, which is to say after the GSEs got out of the subprime business entirely. As much as libertarians hate to admit it, this was almost exclusively Wall Street’s baby.

besides the fact that you ignored all my questions, I think we’re talking about different Fannie & Freddie bailouts. Most of the problem loans were bought after Congress lowered the conforming loans standards for Fannie & Freddie and before Fannie & Freddie paper was backstopped by the full faith and credit of the US gov. Wall Street had laws restricting leverage, and it took Congress to relax them. I think we both agree that the banks were repackaging other loans (ones not sold to Fannie & Freddie), to conceal the risk, and reselling those tranchs at a profit. This is called fraud, yet the watchdogs, a/k/a the government, has been negligent in arresting and jailing those people responsible. Instead, they bailed out the banks that employed them.

>I think that moving from a guaranteed-benefit pension with broadly diversified risk to an all-IRA arrangement where all of the risk is concentrated on the individual, and where losses are not only possible, but entirely likely, seems exceptionally short-sighted to me.

Hell, I’d take a plan where a percentage of my income was forced to buy t-bills, except kept in my name. That would not allow congress to loot the surplus, however.

In your alternatives to Social Security, you still don’t have a guaranteed benefit for life, which is entirely the point of a group pension. The nice thing about Social Security is that you get a consistent, inflation-adjusted benefit from the time you start collecting until the day you die. The same cannot be said for any of the IRA-type accounts, 401(k) benefits, or any other “ownership society” style solutions. Now it’s true that this means that if you die sooner than expected, you can’t leave “your” money to someone else, because there’s no pool of money that’s exclusively “yours.” It’s a guaranteed benefit while you live. But the flip side of that is that if you live a lot LONGER than expected, you don’t have to worry about running out of benefits, or “using up your money,” as you would with a private account.

As I said before, it’s much more like an insurance model than it is like an investment model. In both cases, the model works because the people who take out more than they pay in are offset by the people who pay in more than they take out.

On the repackaging of mortgages, I don’t think the banks were guilty of fraud, at least not in a legal sense (certainly in a moral sense). They disclosed what made up the investments, even though it was virtually impossible to make sense of, and the ratings agencies rated them. If making the downside hard to find constitutes “fraud,” then so does virtually every credit card or consumer loan agreement is also fraud.

But the larger point, which you’ve sidestepped, is that all of the government intervention type stuff (and [Godwin]black community organizers ACORN [/Godwin] and other conservative stalking horses) were small potatoes compared to what the private market did quite by itself, thank you very much. Which is to say that I ignored your questions because they miss the point entirely. At the risk of sounding like Digg, it would be like obsessing about the role Jerry Hairston, Jr.’s played in the Yankees 2009 World Series victory over the Phillies. (Queue Digg explaining at length how he really was a key piece, even though that doesn’t show up in the numbers.)

I’m not happy about the bank bailouts that ensued, either, but I’m not willing to endure a second great depression in the service of spiting them, either. And if you think letting them fail would have somehow “taught them a lesson,” sufficient to prevent anyone from ever making the same mistakes on a similar scale again, I’d like to once again refer you to the “bridges for sale” section of the classifieds.

P.S. What the hell is an MSA? Is that something like a flexible spending account? If that’s what you mean, then I don’t hate them at all. I just think that their usefulness is extremely limited. And the only thing that your link proves is that you still don’t understand the importance of the difference between routine care that can be delayed or even skipped entirely, and the sort of critical, acute care and even chronic care that’s inherently extremely expensive. When you’re having a heart attack, you’re not going to shop around for the ambulance company with the lowest prices before you get in.

>In your alternatives to Social Security, you still don’t have a guaranteed benefit for life, which is entirely the point of a group pension. The nice thing about Social Security is that you get a consistent, inflation-adjusted benefit from the time you start collecting until the day you die.

Possibly not, but this is about as close as you can get. Name one private plan that could have provided such consistent benefit to so many. You can’t, because there’s no such thing.

You have _no_recourse_ if you pay into the system your whole life and congress cuts benefit to a trickle.

Only if idiotic shitheads allow them to get away with it. But I have trouble with “logic” that says that because something that has reliably paid out for 75 years MIGHT get cut, we should gut it entirely.

unsustainable scheme

We’ve done a pretty good job sustaining it so far, I think.

No guaranteed benefit

As previously mentioned, about as close to guaranteed as you can get, and more so than anything you can find in the private sector.

Funny how us libertarian types seldom have an issue paying things like road/fuel tax, or “user fees” (where there is a choice of providers) but force us into a crazy ponzi-like scheme which has traditionally underperformed something like a plain IRA full of T-bills and we get all silly and cry fowl.

Funny how “sustainable” can apply to SS in your mind the way that “well, we haven’t cut down all the trees yet, so logging in the Amazon must still be OK”.

I just want to know one thing, is your overwhelming support for SS because its a wasteful government program that the government can skim a percentage of, or is it the fact that it’s essentially a tax combined with welfare the part y’all generally fap off to? Or maybe it’s the part that pisses off free men the part that gets y’all all giddy?

(I’d post a further rebuttal, but I have no idea if you’ll ever see this)

I don’t know what you did to piss off WP.com, but you skipped the moderation queue and went directly to spam.

Anyway, with respect to the debt paydown of the Clinton years, I don’t suppose you can provide evidence that the Soc. Sec. trust fund bonds are excluded from the calculations of the US public debt, can you? Because unless they are, your objection rings hollow. Debt as a percentage of GDP still went down during the Clinton era (which, to be fair, was in large part because of a divided government, and by no means all Clinton), even when you count the debt represented by those bonds.

Funny how us libertarian types seldom have an issue paying things like road/fuel tax, or “user fees”

Right, because those taxes are regressive, and Libertarians love them some regressive taxation! 🙂

force us into a crazy ponzi-like scheme which has traditionally underperformed something like a plain IRA full of T-bills and we get all silly and cry fowl.

That’s because it’s idiotic to compare it to an IRA, since it was never intended to be anything like an IRA. The insistence on the apples-to-oranges is just odd to me.

Funny how “sustainable” can apply to SS in your mind the way that “well, we haven’t cut down all the trees yet, so logging in the Amazon must still be OK”.

Oh, yes, because it’s just like clear-cutting.

I just want to know one thing, is your overwhelming support for SS because its a wasteful government program that the government can skim a percentage of, or is it the fact that it’s essentially a tax combined with welfare the part y’all generally fap off to?

It’s because it’s an extremely successful and popular social insurance program — precisely the reason why “I’ve got mine, Jack” Libertarian types (most of whom were born on third base and think they hit a triple) hate the program so much. It benefits the working class, and is financed by the working class, so it’s not even your dreaded “wealth redistribution.”

Hey, we’ve been selling gas from pumps since the turn of the century, and it’s also pretty popular, and except for the time that government meddled with the purchase (70s gas rationing) it’s been almost universally available. so that must make the production of gas “sustainable”. Millions of gasoline consumers buy lots of gas, so it’s a popular product that people don’t want to change. We should fight those people who want to allow people to own plug-in-hybrids or all electric cars! At the very least we should force people to pay the gas tax even if they only chose to use public transportation!

>Anyway, with respect to the debt paydown of the Clinton years, I don’t suppose you can provide evidence that the Soc. Sec. trust fund bonds are excluded from the calculations of the US public debt, can you?

I’ve even spot checked the numbers in the table under “So why do they say he had a surplus?” with treasurydirect.gov, and they seem to match. So what was happening during the Clinton “surplus” was that the “Total National
Debt” kept going up, but they didn’t have to sell the normal bonds to the general public because they were getting sufficient funding from those special “non-negotable” IOU-style T-bills that SS was forced to buy.

Analogy fail. Gas is made from a finite natural resource, and its use has global environmental impacts. As long as we don’t experience a sudden and very dramatic dropoff in the working-age population, Social Security will be fine. And if we did experience such a dropoff, we’d have much bigger problems than Social Security.

With respect to your Clinton surplus link, the main problem here is that it uses current dollars in measuring the debt rather than constant dollars or GDP-corrected dollars. Yes, in absolute dollars, the debt went up, but nobody really measures public debt that way. The uncontested fact is that the debt-to-GDP ratio trended consistently downward during the Clinton administration (IOW, GDP was growing faster than the public debt was), and that was the only time since before Reagan took office that’s ever happened. (From WWII to just before Reagan took office, it was consistently happening. I wonder what changed. Hmmm….)

Anyway, I’ll rephrase: unless the “debt” figure in those debt-to-GDP-ratio graphs is explicitly excluding the SS T-Bills (which are no more “IOU-style” than any other T-Bills or government bonds, I should add), then your objection about how it somehow doesn’t count because of the trust fund T-notes makes no sense. It’s a relevant objection when discussing the Clinton budget surpluses, but not when discussing the national debt.

We, on the other hand, can bump the tax on wages up an infinite amount to cover any future shortfall and make sure we always have a SS surplus that we can loot.

>With respect to your Clinton surplus link, the main problem here is that it uses current dollars in measuring the debt rather than constant dollars or GDP-corrected

Ah, so I can borrow a dollar from you one year and pay you back later with only 97 cents? No, I don’t think so. The chart, (which I’ve copied here for further ridicule), clearly states at the top that they used “Public Debt as a percentage of GDP” and is NOT using inflation adjusted dollars. The page I linked explains the difference between “Public Debt” and “Total National Debt”

I don’t see what your huge objection to the graph is. Before Reagan, both parties were fiscally responsible. From Reagan forward, Republicans have been substantially worse on fiscal responsibility than Democrats. And that’s clearly shown in the graph. But when I mentioned current dollars, I was clearly referring to the Clinton surplus article you linked (the Craig Steiner link, specifically the very first table), and not the Brad DeLong chart that I linked. Focus, man, it’s not that hard. And with respect to total debt (including intergovernmental debt), it still trended downward during the Clinton years, and the obvious upward turning point was still Reagan.

We, on the other hand, can bump the tax on wages up an infinite amount to cover any future shortfall

Nobody’s talking about bumping the wage tax “an infinite amount,” or even a substantial amount. And again, you’re selective in your outrage over the growth of unsustainable government projects. Defense spending has grown FAR more than social security spending has, but somehow that’s magically okay, no matter how many tax increases are needed to support it, because deficits apparently don’t matter when the subject is explicitly (sort of) constitutionally mandated. By your own standard described above, defense spending is “a raw deal.”

Ah, so I can borrow a dollar from you one year and pay you back later with only 97 cents?

No, but if your year-over-year income growth exceeds the year-over-year interest accumulation, you’re in a better position even if you owe more in absolute dollars. Suppose you make $50,000 per year and have $20,000 of debt. Now suppose, five years later, you make $75,000 per year and have $25,000 of debt. In absolute dollars, you owe $5,000 more. But your balance sheet looks a lot better in the latter case, because your financial health is a lot better.

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